Parmeshwari Prasad Gupta vs The Union Of India on 2 August, 1973
37) The law of ratification was applied by this Court in Parmeshwari
Prasad Gupta Vs. U.O.I (1973) 2 SCC 543. In that case, the Chairman of the
Board of Directors had terminated the services of the General Manager of a
Company pursuant to a resolution taken by the Board at a meeting. It was
not in dispute that the meeting had been improperly held and consequently
the resolution passed in the said meeting terminating the services of
General Manager was invalid. However, the Board of Directors then convened
subsequent meeting and in this meeting affirmed the earlier resolution,
which had been passed in improper meeting. On these facts, the Court held,
“Even if it be assumed that the telegram and the letter terminating the
services of the appellant by the Chairman was in pursuance of the invalid
resolution of the Board of Directors passed on 16-12-1953 to terminate his
services, it would not follow that the action of the Chairman could not be
ratified in a regularly convened meeting of the Board of Directors. The
point is that even assuming that the Chairman was not legally authorised to
terminate the services of the appellant, he was acting on behalf of the
Company in doing so, because, he purported to act in pursuance of the
invalid resolution. Therefore, it was open to a regularly constituted
meeting of the Board of Directors to ratify that action which, though
unauthorised, was done on behalf of the Company. Ratification would always
relate back to the date of the act ratified and so it must be held that the
services of the appellant were validly terminated on 17-12-1953.”